On the power of students

I am generally against group decisions... However there is one I always ask my students to do.

In my intro to finance class I like to ask my students to allocate $100,000 to a number of companies.  I do this at the very beginning of the semester, way before we cover anything related to stock valuation. Students generally look at me funny, humor me while thinking there must be something wrong with me.

I aggregate all their responses and create a weighted portfolio. As the semester moves along we begin talking about stocks, risk and portfolios and little by little I show them their own portfolio. They (and me included) marvel at how good a portfolio can be made by people with little or no background.

This year I decided to start sharing these portfolios in this blog and collecting the data in a more formal way.

We opened the portfolio on February22nd 2012. Since then the S&P500 has climbed from 1357.66 to 1395.95 or 2.82%.

My student generated portfolio? --> 4.16%

See the portfolio for yourself sorted by holdings.